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Archive for the ‘Employment Law Blog – GA’ Category

EEO-1 Pay and Hours Data Requirement In Limbo

Posted on: March 21st, 2019

By: Brent Bean

Whether and when covered businesses have to comply with revised EEO-1 requirements for pay and hours worked data remains uncertain as the reporting period opens. Companies with 100 or more employees, along with federal contractors who employ 50 or more employees, are required to submit to the EEOC annual Employer Information Reports, so-called EEO-1 reports. These reports disclose information concerning the number of employees a company employs broken down by job category, race, sex, and ethnicity. In 2016 the EEOC requested approval from the Office of Management and Budget to begin collecting pay and hours worked data. The ostensible aim of these additions was to generate data from which the Commission could begin to identify pay disparities and potential discriminatory practices.

In August 2017 OMB announced a stay of these new collection requirements due to the burden imposed on businesses when weighed against the perceived utility of the data. In response, the National Women’s Law Center brought suit in the District Court for Washington, D.C., challenging the OMB’s basis for taking that action. On March 4 of this year, that court issued an opinion reinstating the pay and work hours reporting requirement, finding the OMB had acted arbitrarily and capriciously in eliminating the requirement. See National Women’s Law Center v. Office of Management and Budget, 2019 U.S. Dist. LEXIS 33828 (D.D.C. Mar. 4, 2019).

EEO-1 reports for 2018 however, are due between March 18 and May 31. Accordingly, this recent ruling and putative change in reporting requirements raise some significant concerns about the practical ability of employers to comply on such short notice. The EEOC’s portal for EEO-1 reports opened on Monday, March 18 without any reference to pay and hours worked data. The Commission stated that it is working diligently on complying with the court’s order and further information regarding pay and hours worked reporting would follow.

While it is expected that the OMB will appeal the District court’s ruling, it is not clear at all whether that appeal will cause a stay of the reporting requirement for pay and hours information for 2018.

So questions remain: will employers have to provide this information in their 2018 reports and if so, when?

At a status conference on March 19, the District Court Judge issued an order that the Commission must explain by April 3 how it will implement the March 4 Order reinstating the collection of pay data. As such, we can expect some additional information from the Commission by then, as well as perhaps a notice of appeal from OMB.

FMG will keep you updated on activity by the Commission and the Courts. But employers should prepare now with a thorough review of their pay structures in order to identify not only any disparities that may raise red flags and draw increased scrutiny, but also to understand what legitimate, non-discriminatory reasons exist for their present pay practices.

If you have any questions or would like more information, please contact Brent Bean at [email protected].

DOL Guidance Says Employers Cannot Exhaust Paid Leave Prior to Beginning Employee’s FMLA Leave

Posted on: March 18th, 2019

By: Brent Bean

The U.S. Department of Labor issued an opinion letter on March 14, 2019, re-affirming its view that employers must start the clock on an employee’s FMLA leave when the employer first learns the absence qualifies as a serious health condition under the FMLA.

The Opinion Letter specifically addressed the question of whether an employer can delay the designation of FMLA leave until after an employee first uses any paid leave the employee has accrued. Answering this question, the DOL emphasized that, once an employer has enough information to conclude that the leave is covered by the FMLA, it must designate such leave with 5 days. In issuing its answer, the DOL made clear that, even if an employee desires to delay the designation of FMLA leave so it can first use accrued paid leave, the employer is not permitted to do so.

Rather, as the Labor & Employment Group at FMG has long emphasized to our clients, if an employee has accrued paid leave, it should simply count any paid leave against the FMLA 12-week entitlement (in other words, simultaneous exhaustion of paid leave and FMLA leave). For instance, if an employee has 6 weeks of paid sick leave and wants to take 10 weeks of FMLA leave, the first 6 weeks of the FMLA leave will be paid and the remaining 4 weeks will be unpaid. When the employee returns from the 10 weeks of FMLA leave, the employee, having used his/her 6 weeks during FMLA leave, will have no more paid sick leave until the employee begins to accrue new paid sick leave time.

Not only does the DOL’s Opinion Letter reiterate that FMLA leave will always run from the date the employer learns the leave qualifies, it also clarifies the DOL’s position with respect to a 2014 Ninth Circuit opinion that permitted an employer to decline FMLA leave in favor of paid time off.  See Escriba v. Foster Poultry Farms, 743 F.3d 1236 (9th Cir., 2014).

In Escriba, the plaintiff requested leave to help her ill father in Guatemala. And when she asked for leave, she specifically requested that she be allowed to use vacation time instead of FMLA leave time for her trip. She then left for Guatemala but didn’t contact the company again until 16 days after she said she would return. When she returned, her employer notified her that it had terminated her as she had violated its three-day no-call, no-show rule. After she was fired, the plaintiff filed a lawsuit claiming FMLA interference, saying that informing her supervisors about her father’s illness should have triggered FMLA protection. The court held that the employee can delay the use of FMLA leave by opting instead to first use paid leave (even if the leave is related to an FMLA-qualifying condition).

The DOL Guidance provides that the rule in Escriba would no longer apply. Employers must designate FMLA leave once they have enough information to conclude the leave is covered and, if the employee desires to use some other form of paid leave, that leave would run concurrently.

If you have any questions or would like more information, please contact Brent Bean at [email protected].

Employers Should Consider “Prevailing Party” Language In Arbitration Clauses

Posted on: March 13th, 2019

By: Ken Menendez

Employers seeking to discourage frivolous claims by employees may wish to consider utilizing a “prevailing party” clause as part of their agreement to arbitrate.

Many employers utilize arbitration as a means of avoiding the generally greater cost and uncertainty of litigation in employment cases. Agreements to arbitrate are even more prevalent in employment agreements with highly compensated or professional employees.

One of the advantages of arbitration is the ability of the parties to the agreement to establish the rules governing the arbitration and arbitration award. In addition to procedural and logistical guidelines, the parties to an arbitration agreement may also authorize the arbitrator or arbitrators to award the costs, including attorney’s fees, of the arbitration to the prevailing party in the arbitration.

Such a clause might read as follows:

The arbitrators shall award the costs and expenses of the arbitration, including attorney’s fees, to the prevailing party as determined by the arbitrators in their discretion.

A “prevailing party clause” such as the foregoing may reduce the number of baseless claims against an employer, as potential claimants will have to weigh the risk of paying the employer’s costs in the event that the arbitrators rule that the employer was the prevailing party.

The foregoing arbitration clause requires the award of costs to the prevailing party. The drafters of the clause could, if they wished to do so, also make the award of costs discretionary simply by changing the word “shall” to “may.” It is also important to note that the foregoing clause requires the arbitrators to determine which party is the prevailing party. Because many employment cases contain both claims and counterclaims, placing the responsibility for identifying the prevailing party on the arbitrators eliminates subsequent disputes between the parties regarding which party was the prevailing party.

If you have any questions or would like more information, please contact Ken Menendez at [email protected].

Department of Labor Unveils Its Long-Awaited Proposed Overtime Rule

Posted on: March 11th, 2019

By: Brad Adler

On March 7, 2019, the U.S. Department of Labor (DOL) released its long-awaited proposed rule that would revise the white collar overtime exemption regulations.  In its proposed rule, the DOL proposed raising the minimum annual salary for exempt status from $23,360 to $35,308 (an increase in the weekly rate from $455 to $679).  This is a significantly smaller increase than the increase that had been adopted by the DOL in 2016 ($47,476 per year) while President Obama was in office.  Of course, a court blocked that increase from taking effect.

Like the 2016 final rule, the DOL’s new proposal would allow employers to satisfy up to 10% of the $35,308 minimum salary requirement by the payment of nondiscretionary bonuses, incentives and commissions.  Notably, however, while the 2016 rule required that the bonuses be paid at least quarterly, the new proposal contemplates that they can be paid annually (or more frequently if desired).  Specifically, employers would have one catch-up period at the end of a 52-week period to make up any shortfall in the employee’s salary to bring it up to the required minimum.

As a result of this proposed provision, the employer could pay the employee a guaranteed minimum salary of $611.10 per week (90% of the weekly salary) and, if bonus and incentive compensation do not bring the person up to the minimum salary level by the end of the year, the employer would have one chance to make up the difference.

In addition to increasing the minimum salary, the DOL also proposed increasing the minimum annual compensation to qualify for the FLSA’s “highly compensated employee” exemption, from $100,000 to $147,414 (of which, at least $679 per week must be paid on a guaranteed salary or fee basis).

The public will have 60 days to submit comments on the proposed rule, but the rule ultimately is expected to take effect on January 1, 2020.

If you have any questions or would like more information, please contact Brad Adler at [email protected].

EEO-1 Reporting Is Coming and There Are Some Things You Should Know

Posted on: March 11th, 2019

By: Hillary Freesmeier

Employers with 100 or more employees are no stranger to the EEO-1 Report. The EEO-1 Report requires all employers with 100 or more employees, or federal contractors with 50 or more employees awarded a contract of $50,000 or more, to report employee demographics by gender, race, and ethnicity each year. Typically, the report must include data from any pay period from October to December and must be filed by March 31 of the following year. However, in light of the government shutdown, the EEOC has delayed the opening of the EEO-1 reporting period to March 18, 2019 and has extended the deadline to May 31, 2019.

Additionally, a federal court has reinstated previous expansion to the EEO-1 Report, which requires employers to also track and report compensation and hours worked within 12 pay bands based on employees’ gender, race, and ethnicity.

Such expansion dates back to a January 2016 Obama-era proposal that required employers to also provide W-2 earnings and hours worked with their EEO-1 Report in an effort to increase pay transparency and equal pay compliance. Such proposal was approved by the Office of Management and Budget (OMB) in September 2016 and was titled “Component 2.” Before Component 2 could be implemented, the OMB decided to review and stay the collection of Component 2 data.

Shortly after the stay was effected, the National Women’s Law Center and the Labor Council for Latin American Advancement sued to reinstate the Component 2 reporting requirements. On March 4, 2019, U.S. District Judge Tana J. Chutkan in the District of Columbia vacated OMB’s stay and ordered that the Component 2 revisions go into effect.

Although the EEO-1 reporting period is just days away, employers don’t be alarmed. It is unlikely that the EEOC will require Component 2 reporting for 2018 on such short notice. Additionally, it is currently anticipated that the government will appeal the ruling. Therefore, employers’ best course of action is to monitor the EEO-1 reporting requirements closely. FMG will continue to watch the EEO-1 Report developments and provide updates to keep employers informed.

If you have any questions or would like more information, please contact Hillary Freesmeier at [email protected].